Friday, March 24, 2006

Europe’s Ailing Social Model: Facts & Fairy-Tales

The "Brussels Journal" is the best I have read on Europe's problems. [hat tip Roger Simon] Some excerpts:

On 23 and 24 March the European Council is meeting to discuss the future of Europe’s social model. The very essence of the welfare state is at stake. Europe’s present social model is unable to tackle the modern challenges of globalization, and has left Europe with gigantic problems: an unsurmountable public debt, a rapidly ageing population, 19 million unemployed, and an overall youth unemployment rate of 18%. The unemployment figures may easily be doubled to account for hidden unemployment. The untold reality is that Europe’s real unemployment stands at the level of the 1932 Depression.

.......The reality of Europe’s ailing economy contrasts sharply with its economic potential and with the massive resources employed to cure its ailing growth. The whole arsenal of Keynesian remedies has now been tried and has failed one by one. Massive deficit spending throughout the eighties and nineties has left Europe with a public debt unequalled in history. The size of Europe's monumental public debt is only surpassed by the hidden liabilities accumulated in Europe’s shortsighted pay-as-you-go public pension schemes.

.....In an effort to keep the dancing on the Titanic going, Europe’s catastrophic situation is systematically hidden from public opinion. Official unemployment data, debt figures, and poor growth performance are systematically and grossly underestimated. Thus the public debate and the whole democratic decision making process is being falsified by lies and wishful thinking. Even the best policy makers are making the wrong diagnosis based on the wrong statistics, and as a consequence prescribe the wrong remedies. Having accumulated such monumental debt through years of over-consumption, Europe can indeed no longer blame its ailing growth on slow consumer sales. It is the supply side that is failing. Policies aimed at boosting Europe's economy should therefore no longer be aimed at stimulating consumption but at stimulating the defaulting creation of wealth. Read it all


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